Summary and Analysis
Book V:
Chapter V - Reciprocal Justice and the Function of Money

The Pythagoreans define absolute justice as reciprocity, saying that justice in the unqualified sense is having done to one what one has done to another (i.e.,an eye for an eye). The principle of reciprocity as they state it is oversimplified and does not agree with the ideas of distributive and remedial justice as we have explained them above. There are many situations in which reciprocity and justice are not the same (e.g.,if a magistrate strikes a man, he should not be struck in return, but if an ordinary citizen strikes a magistrate, he should not only be struck in return but punished).

In certain kinds of dealings between men, however (e.g.,economic activities and associations based on mutual exchange), the principle of reciprocity does apply, if it is defined as proportional reciprocity rather than reciprocity on the basis of absolute equality.

A state or community is bound together by relations between its members based on exchange of goods and services. Since people are not willing to exchange unless they get as good as they give, a principle or proportional reciprocity is necessary for guiding such relations. Proportional reciprocity takes into account the comparative skill of both parties and the comparative worth of their products, and is determined by a diagonal combination of terms. Here is an example:

A is a builder, B is a shoemaker, C is a house, D is a shoe. The builder takes the shoemaker's product (a shoe) from the shoemaker and gives his own product (a house) in return. A fair reciprocal exchange takes place if equality has been established between the goods.

Simple reciprocity as shown in the above example will not usually work since the exchanging parties and the value of the things they offer for exchange must always be taken into consideration. Many cases are complicated because A may want B's product while B does not want A's product in return. Before any fair exchange can take place, it is necessary to find a standard of value by which all goods and services can be measured.

This is the function of money, which has been developed and put into use as a kind of common denominator for expressing the value of goods and services. It acts as a sort of middle term in the proportion, telling us, for example, how many shoes are equal to a house or to a given amount of food. Money acts as a representative of demand. Money exists by current convention rather than by nature, and it is within human power to change or destroy its value.

Money is subject to fluctuations in value, just like all other commodities, but it is more stable than goods whose value is specifically related to the particular demands of individuals at any given moment. By using money as a measure to establish proportional value, it is possible to make goods equal, and this standard, arbitrarily accepted, makes exchange and community possible. All things, however different, can be measured in terms of money.

Exchange only takes place when equality between goods can be established. There can be no real equality without an idea of proportion.

While it is impossible for different things really to be equal, money allows the establishment of an equality adequate for the needs of daily intercourse. Here is an illustration:

A is a house, B is $10.00, C is a bed. The value of the house is $5.00 (A=B/2), the value of the bed is $1.00 (C=B/l0).This makes it clear how many beds are equal in value to one house (5)and makes it possible for a fair exchange to take place.

Prior to the development of money, exchange may have existed on just this basis as a form of barter, for it makes little real difference (aside from the convenience) whether one pays five beds or the value of five beds for one house. The convenience, however, is a very important factor, since it makes possible all kinds of transactions, with the nature and conditions of these transactions not dependent on the type of goods or service one happens to produce or the type of goods or service required by the other party.

In regard to the whole discussion of justice in its different forms, it can be said that just behavior is a mean between doing injustice and suffering it. To do injustice is to have more than one's share and to suffer injustice is to have less.

Justice can be viewed as a mean, but it is unlike the other virtues. They are all relative things determined in regard to certain extremes. Justice is a permanent attitude of the soul toward the mean (i.e.,a disposition by virtue of which a man always deliberately chooses that which is just). Injustice is related to vice in the same way. We may conclude that justice is the objective observation of proportion in all areas of life based on a subjective perception of what is proportional.